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Friday, May 13, 2016

Alimony, Short For “All The Money”

Who doesn’t love a good discussion of alimony, or, as we in Vermont call it, “spousal maintenance”? Spousal maintenance is money you pay your ex-spouse so she (or he) can continue on in the lifestyle to which they’ve become accustomed. It’s a hot topic for us divorce attorneys, and is the focus of this case as well.

Husband and Wife divorced in 2007 and agreed that Husband would pay Wife $1800 per month permanently (that means forever). In January 2015, Wife filed a motion for contempt because Husband had not paid her and said he was no longer going to pay her. Husband opposed the motion and filed his own to modify his monthly obligation claiming that he could no longer pay the court-ordered amount of $1800, and that since the final divorce, the parties had agreed to reduce the payments. Husband also argued that both parties’ finances had changed since the divorce.

The lower court found the following: Husband is a self-employed truck driver, and when the parties’ divorced, he lived in his truck and had minimal expenses. Husband remarried and moved in with his new wife. Husband and his new wife, with their combined incomes, can meet their basic needs and have about $250.00 left over each week. Husband also told the court that he did not understand what “permanent” mean, and he thought he was just trying to keep Wife, who was unemployed at the time of the divorce, in their condominium. Since the divorce, Wife sold the condominium, got a job with the University of Vermont, receives retirement funds monthly, and money from Social Security Income monthly.

Husband and Wife often talked about reducing the amount of the monthly alimony payments over the years. Wife suggested lowering the payments because she felt that if she insisted on the full amount, Husband would not pay her anything. The trial court found there was never an enforceable agreement, and at the most, Wife exercised forbearance.

The court found no “real, substantial, and unanticipated change of circumstances” to warrant modification. The court reasoned that one could anticipate that Husband would remarry and move in with his new spouse, thereby increasing housing expenses. Also, one could anticipate that the wife would move from the condo and get a job. The court also recognized that $1800 per month was excessive, but then again, it was excessive when he agreed to it in 2007 as well. The court ordered Husband to pay $42,542 in maintenance arrears, but denied Wife’s motion for contempt and attorneys fees because Husband did not have the present ability to pay either the arrearages or the $1800 monthly obligation.

Husband appeals arguing that the court erred in finding no change of circumstances sufficient to consider modifying the order, and it also erred in concluding the parties’ agreements did not amount to a modification. The SCOV reviews looking for clearly erroneous findings of fact.

Under this statute, a court may modify a spousal maintenance award only upon a showing of a real, substantial, and unanticipated change of circumstances. The SCOV explains that “unanticipated” must be interpreted by reviewing the facts and circumstances underlying the divorce order to determine whether these conditions were taken into account in establishing the original maintenance order. If they were taken into account, then they were anticipated. If not, then the condition is unanticipated. When it comes to remarriage, the SCOV notes that remarriage is possible for a divorced person, but it still may constitute a change of circumstances depending on its effect on the party’s financial security. Even if the maintenance award contains a provision regarding remarriage (making it clearly anticipated), modification might be appropriate anyway.

The SCOV concludes that the trial court’s view of “changed circumstances” was overly narrow, and not reflected in Vermont’s case law. It’s always within the realm of possibility that a party might remarry, take or lose a job, or incur increased expenses, but it doesn’t necessarily mean those changes are unanticipated.

The question is whether Husband’s move into the home, Wife’s move out of the condo, and Wife’s new job, departed substantially from the assumptions in the stipulated order. The SCOV finds that the evidence supported an unanticipated change of circumstances, and because the trial court used an incorrect standard, reverses and remands on those grounds. The SCOV also gives further instruction that the trial court needs to consider the parties’ economic circumstances at the time of the final divorce order as compared to their economic circumstances at the time of the hearing.

In regards to arrearages, Husband argues that Wife agreed to accept lesser amounts over the years, and those amounts should be enforced, not the full $1800. Wife argues that Husband is trying to modify his obligation retroactively. The SCOV notes that the effective date of a court’s modification cannot predate the date of the motion to modify. Thus, the SCOV rejects Husband’s argument that the parties modified the existing court order by agreement. However, the SCOV notes that Husband’s argument is that Wife agreed to accept reduced payments in full satisfaction, thereby forfeiting her right to retroactive payments. To remedy this, the SCOV directs the trial court to address the question of “whether, when, and to what extent, wife may have forfeited her right to retroactive payments” as a result of agreement, waiver, or equitable estoppel.